This paper addresses questions related to small and medium enterprises (SMEs). The intermediate objective is to conduct an exploratory study of the socioeconomic importance of SMEs and the difficulties SMEs face in raising funds. The literature review indicates that the main factors responsible for the slow growth or the failure of SMEs in Brazil and worldwide are the company owners' lack of management training, followed by a deficiency in an SME's ability to acquire and manage financial resources. Exploratory research was performed, followed by a multiple case study that includes interviews of six investors, three located in the city of Rio de Janeiro and three located in the city of São Paulo. The result of this study indicates that the most important criteria used by venture funds when deciding to invest in SMEs are the management, the quality of the team and the level of entrepreneurial skills.
Keywords: SMEs, small and medium–sized enterprises, venture capital, SME funding, investment, financial resources, Brazil, SME management, team quality, entrepreneurial skills